Chris Edwards
A recent US Postal Service (USPS) forecast shows that the relentless decline in paper mail over two decades will continue in coming years. Personal letters, invites, bills, bank statements, periodicals, and advertising junk mail are being replaced by the internet. The mail-sourced revenue supporting the massive 640,000-employee USPS is disappearing.
This USPS figure shows that mail volume peaked in 2006, plunged by 51 percent by 2024, and may fall another 32 percent by 2035. The figure includes first-class mail, marketing (advertising) mail, and periodicals.
The government-owned USPS earned revenues of $81 billion in 2024 from the collection and delivery of mail and packages. The share of revenue from mail dropped from 85 percent in 2000 to 51 percent by 2024 and will continue to fall. The USPS is becoming mainly a package company, but we don’t need the government in that business because UPS, FedEx, Amazon, and other private firms already handle it.
Letters used to generate monopoly profits that kept the inefficient USPS afloat, but that business model has no future. Snail mail is going extinct not only in the United States but around the world. Indeed, America is a bit behind the curve on mail declines.
In Canada, mail volume has plunged 60 percent since 2006.
In Britain, mail volume has plunged 67 percent since 2005 and is expected to fall another 39 percent in the next four years.
In Australia, mail volume has plunged 72 percent since 2006 and is expected to fall another 35 percent in the next four years.
With the writing on the wall, many countries are restructuring their postal systems to cut costs. They are closing post office locations and reducing the speed and frequency of delivery. Denmark is at the leading edge. The country has become so digitized that mail volume has plunged 90 percent since 2000. That drop prompted the nation’s main postal company to recently announce the end of regular mail delivery.
Congress has resisted postal cost-saving reforms, and the dinosaur USPS has been bleeding red ink for years. Perhaps policymakers assume that the USPS and its huge workforce can fully transition into package delivery as mail vanishes. But that is doubtful because the competition from private package firms will be very tough, even with the unfair tax and regulatory advantages held by the USPS. New entrants to the package industry are grabbing market share from the industry leaders.
The USPS is in a corner. The best way out is to privatize the company, deregulate postal markets, and allow the USPS to cut costs, innovate, and diversify to survive.
